consolidated profit and loss

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
can someone please explain for me. I know when doing the consol.profit and loss you have to do some adjustment, but can you explain when exactly i am to do the adjustments to sale ect. for instance some of the questions might say they sold goods costing x for x price and the goods sold at year end for x how many adjustments do i need to do

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    consolidated profit and loss

    Hi<BR><BR>Sales and purchase between the companies in the groupd must be removed.<BR><BR>So if A sells £500 of goods to B, A's sales must be reduced by £500 and B's purchases/cost of sales must be reduced by £500. Th remaing sales/turnover and purchases/cost of sales figures can be added together.<BR><BR>If some of the stock of intercompany trade remains in stock by the purchasing company at the period end, the unrealised profit needs to be removed by increasing the purchases/cost of sales of the buying company by the unrealised profit figure. The unrealised profit figure is the selling price of the goods minus the original purchase price.<BR><BR>Remeber that the above calculation for unrealised profit will give the entire profit of the sale, you must then only use a proportion of this for the stock remaining in stock.<BR><BR>Neil
  • System
    System Posts: 100,534 🤖 Admin 🤖
    consolidated profit and loss

    CAN YOU GIVE ME ANOTHER EXAMPLE
  • System
    System Posts: 100,534 🤖 Admin 🤖
    consolidated profit and loss

    Hi<BR><BR>Is there anything you are having sepcific troubles with?<BR><BR>One thing i forgot to metntion in my example above is to deduct the percentage of profit that 'goes to' the minority interest.<BR><BR>Neil
  • System
    System Posts: 100,534 🤖 Admin 🤖
    consolidated profit and loss

    what really gives me problem sometimes is the year end and within the year, when to do what and when

Categories

Privacy Policy